LIC's Protection Plus (886)

How the plan works

Protection Plus is a non-participating unit-linked life insurance plan. In this policy, the investment risk in the investment portfolio is borne by the policyholder. You choose the premium, a Basic Sum Assured multiple, the premium paying term and the policy term. After the premium allocation charge, premiums buy units in the fund you select. Top-up premiums go into a separate Top-up Premium Fund in the same fund type. There is a 5-year lock-in during which money cannot be fully or partly withdrawn. Risk cover starts from the date of commencement. It can be bought through agents and other intermediaries or online at www.licindia.in.

Premium paying term and policy term

Minimum entry age is 18 years (completed). Maximum maturity age is 75, 80, 85 or 90 years for policy terms of 10, 15, 20 or 25 years. No maximum premium, subject to underwriting.

Basic Sum Assured multiple

Minimum: 7x annualised premium (entry age below 50) or 5x (entry age 50 and above). Maximum, for annualised premium of ₹60,000 or more:

For annualised premium below ₹60,000 (PPT 15 only), the maximum multiple is 30 (age 18-30), 20 (31-40), 15 (41-45), 10 (46-50) and 7 (51-65).

Death benefit

If the life assured dies during the term while the policy is in force, the nominee gets the highest of:

• Basic Sum Assured, less partial withdrawals in the two years before death,
• Base Premium Fund Value, or
• 105% of total base premiums paid.

If top-ups were paid, the nominee also gets the highest of total Top-up Sum Assured, Top-up Premium Fund Value, or 105% of total top-up premiums paid. The death benefit can be paid in instalments over up to 5 years under the settlement option.

Maturity benefit

On survival to maturity, the total unit fund value (base plus top-up funds) is paid, along with a refund of all mortality charges deducted for life cover (excluding underwriting extras and taxes). No refund on surrendered or discontinued policies. This plan does not offer Guaranteed Additions.

Fund options

Four switches per policy year are free; then ₹100 per switch. Discontinued policies are held in the Discontinued Policy Fund, which earns at least the regulatory guaranteed rate (currently 4% p.a.).

Charges

• Premium allocation charge (regular/limited premiums): Offline 8% in year 1, 5.5% in years 2-5, 3% thereafter. Online 3%, 2% and 1%. Top-ups: 2.5% offline, 1.5% online.
• Policy administration charge: Nil for the first 5 years. From year 6: ₹85 per month (annualised premium below ₹60,000) or ₹100 per month (₹60,000 or more), increasing 5% a year from year 7.
• Mortality charge: Age-based, on the sum at risk; may rise each year with age. Sample annual rates per ₹1,000 sum at risk for a healthy life: age 25 ₹1.17, 35 ₹1.50, 45 ₹3.22, 50 ₹5.55, 60 ₹13.95.
• Accident benefit charge (if rider opted): ₹0.40 per ₹1,000 accident benefit sum assured per year (₹0.80 for police duty, other than paramilitary).
• Fund management charge: 1.35% p.a. for all six funds; 0.50% p.a. for the Discontinued Policy Fund.
• Discontinuance charge: Only if discontinued in the first 4 years; nil from year 5. Not charged on the top-up fund.
• Partial withdrawal charge: ₹100 each. Switching charge: ₹100 beyond 4 free switches. Miscellaneous charge: ₹100 per alteration (mode change, sum assured change, adding rider). Bid-offer spread: Nil.
• GST applies on charges. Charges other than mortality and accident benefit may be revised within IRDAI caps after 3 months' notice.

Optional riders

• LIC's Linked Accidental Death Benefit Rider (UIN: 512A211V02): at inception or any policy anniversary if at least 5 years of term remain, up to age 65 (nearer birthday); cover runs to maturity or age 70, whichever is earlier. Accident Benefit Sum Assured cannot exceed the Basic Sum Assured.

Loan, surrender & revival

• Loan: Not available under this plan.
• Partial withdrawal: After the 5-year lock-in, taken first from top-up funds that have completed their own 5-year lock-in, then from the base fund. Maximum per year: 15% of fund in years 6-10, 20% in years 11-15, 25% in years 16-20, 30% in years 21-25. Minimum withdrawal ₹1,000. The fund must keep at least 4 annualised premiums (annual premium below ₹60,000) or 3 annualised premiums (otherwise).
• Surrender: During the lock-in, the base fund (less discontinuance charge) and top-up fund move to the Discontinued Policy Fund and are paid at the end of the lock-in. After the lock-in, the fund value is paid with no discontinuance charge. A surrendered policy cannot be reinstated.
• Discontinuance: Unpaid premium after the grace period during the lock-in stops cover and moves funds to the Discontinued Policy Fund. After the lock-in, the policy becomes reduced paid-up, with sum assured reduced in proportion to the premium period paid; top-up cover continues.
• Revival: Within 3 years from the first unpaid premium (or up to maturity if earlier, after lock-in), by paying all due premiums without interest, subject to underwriting.

Other key terms

• Grace period: 30 days for yearly, half-yearly or quarterly premiums; 15 days for monthly (NACH).
• Free-look period: 30 days from receipt of the policy document.
• Top-up premium: Minimum ₹1,000 (multiples of ₹1,000), allowed while the policy is in force except in the last 5 policy years; each top-up is locked in for 5 years.
• Increase in cover: Within 12 months of marriage or birth/legal adoption of a child (or other allowed events), up to age 45 (nearer birthday), subject to underwriting; cannot be reduced later.
• Decrease in cover: Allowed within plan limits; cannot be increased back later.
• Compulsory termination: After 5 years, if the fund cannot cover charges, the policy ends and any balance is refunded.
• Suicide: Within 12 months of policy start or revival, only the fund value is paid.